Criminal Complaint by Telephone or Other Reliable Electronic Means — No. 5:21-cr-00170 (Dkt. 1, C.D. Cal.)
Summary
Criminal complaint and 48-page affidavit by IRS Criminal Investigation Special Agent Daniel Dreyer charging Carl Bradley Johansson with bank fraud and conspiracy to commit bank fraud, sworn by telephone before Magistrate Judge Alexander F. MacKinnon on July 2, 2021. It alleges that Johansson's company Western Distribution, LLC obtained a $436,390 Paycheck Protection Program loan without disclosing that he managed other businesses. According to the complaint, 21 individuals paid by a separate company were placed on Western Distribution's payroll in September 2020, and a forgiveness application then claimed the loan had paid their salaries. The affidavit lists aliases including Brad Johnson and Keith Golwick and describes a practice of keeping multiple DOT registration numbers for trucking companies with a history of safety violations. The charges are allegations.
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“Criminal Complaint by Telephone or Other Reliable Electronic Means — No. 5:21-cr-00170 (Dkt. 1, C.D. Cal.).”
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AO 91 (Rev. 11/11) Criminal Complaint (Rev. by USAO on 3/12/20) ܆Original ܆Duplicate Original
UNITED STATES DISTRICT COURT
LODGED
CLERK, U.S. DISTRICT COURT
for the
Central District of California 07/01/2021
United States of America CENTRAL DISTRICT OF CALIFORNIA
jbb
BY: ___________________ DEPUTY
v.
Case No. 5:21-mj-00461
CARL BRADLEY JOHANSSON,
Jul -2 2021
Defendant(s)
ib
CRIMINAL COMPLAINT BY TELEPHONE
OR OTHER RELIABLE ELECTRONIC MEANS
I, the complainant in this case, state that the following is true to the best of my knowledge and belief.
On or about the dates of April 24, 2020 through March 24, 2021, in the county of Riverside in the Central
District of California, and elsewhere, the defendant violated:
Code Section Offense Description
18 U.S.C. §§ 1344(2), 2(b), 1349 Bank Fraud, Causing An Act To Be
Done, Conspiracy To Commit Bank
Fraud
This criminal complaint is based on these facts:
Please see attached affidavit.
_ Continued on the attached sheet.
/S/
Complainant’s signature
Daniel DrHyer, Special Agent
Printed name and title
Attested to by the applicant in accordance with the requirements of Fed. R. Crim. P. 4.1 by telephone.
Date: 7/2/2021
Judge’s signature
City and state: Los Angeles, California Hon. Alexander F. MacKinnon, U.S. Magistrate Judge
Printed name and title
AUSA: Matthew O’Brien, ext. 8644
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ATTACHMENT TO COMPLAINT
Offense Descriptions:
[18 U.S.C. §§ 1344(2), 2(b)]
On or about January 19, 2021, in Riverside County, within the Central District of
California, and elsewhere, defendant CARL BRADLEY JOHANSSON, also known as (“aka”)
“Brad Johansson,” aka “Brad Johnson,” aka “Carl Johnson,” “C. Brad Johanson,” aka “Jay
Johnson,” aka “Keith Golatta, ” aka “Keith Golwick” (“JOHANSSON”), acting with the intent to
defraud, knowingly executed and attempted to execute a scheme to defraud a federally-insured
financial institution, as to material matters, and to obtain moneys and funds owned by and in the
custody and control of the Bank by means of material false and fraudulent pretenses,
representations, and promises, and the concealment of material facts. To execute the fraudulent
scheme, defendant JOHANSSON submitted, and caused to be submitted, a Paycheck Protection
Program (“PPP”) loan forgiveness application for his company Western Distribution, LLC in the
amount of $436,390, which falsely claimed that Western Distribution, LLC employed certain
workers, and used its PPP loan to pay salaries for those certain workers, when those workers
were not in fact employed by Western Distribution, LLC and had not been paid by Western
Distribution, LLC using its PPP funds.
[18 U.S.C. §1349]
From on or about April 24, 2020 through March 24, 2021, in Riverside County, within
the Central District of California, and elsewhere, defendant JOHANSSON, together with others
known and unknown, conspired to commit bank fraud, in violation of Title 18, United States
Code, Section 1344. The objects of the conspiracy were carried out, and to be carried out, in
substance as follows:
In April 2020, defendant JOHANSSON, and his co-conspirators, would cause Western
Distribution, LLC to apply for and obtain a PPP loan in the amount of $436,390, yet fail to
disclose on the PPP loan application that Western Distribution, LLC shared common
management (i.e., defendant JOHANSSON) with other businesses, and falsely claim on the PPP
loan application that Western Distribution, LLC would spend the loan proceeds in accordance
with the PPP rules. In September 2020, defendant JOHANSSON, and his co-conspirators,
would cause 21 individuals to be placed on Western Distribution, LLC’s payroll, even though
those 21 individuals did not work for Western Distribution, LLC and their salaries were being
paid by a separate company. Defendant JOHANSSON, and his co-conspirators, would cause
Western Distribution, LLC to submit a PPP loan forgiveness application in January 2021 that
falsely claimed that the 21 individuals worked for Western Distribution, LLC so that Western
Distribution, LLC could meet the PPP loan-forgiveness eligibility requirement that at least sixty
percent of a company’s PPP loan be spent on payroll. In March 2021, defendant JOHANSSON,
and his co-conspirators, would cause Western Distribution, LLC to apply for a second PPP loan
in the amount of $231,527, using the same fraudulent scheme whereby they represented – falsely
– the number of employees who worked for Western Distribution, LLC in order to obtain a
larger loan.
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Contents
I. INTRODUCTION..........................................1
II. SUMMARY OF PROBABLE CAUSE.............................2
III. THE PAYCHECK PROTECTION PROGRAM.......................6
IV. STATEMENT OF PROBABLE CAUSE...........................8
A. JOHANSSON’s History of Concealing His Involvement
in His Trucking Companies........................8
B. JOHANSSON’s Formation of Western Distribution,
LLC in Early 2019...............................15
C. JOHANSSON’s Fraudulent Use of Advanced Fuel
Delivery’s Name and DOT Registration Number.....17
D. JOHANSSON’s Decision to Make Western
Distribution, LLC a Defunct Entity as of
September 2019..................................19
E. JOHANSSON’s Control of Western Distribution, LLC
................................................22
F. Western Distribution, LLC’s First PPP Loan
Application in April 2020.......................23
G. Company A’s PPP Loan Application in April 2020..26
H. Western Distribution, LLC’s Expenditure of Its
First PPP Loan..................................29
I. The Transfer of Company A’s Employees to Western
Distribution, LLC’s Payroll Account.............32
J. Western Distribution, LLC’s Fraudulent PPP Loan
Forgiveness Application.........................35
K. Western Distribution, LLC’s Fraudulent Second PPP
Loan Application in March 2021..................38
L. JOHANSSON’s Concurrent Fraud on the Department of
Transportation..................................41
V. CONCLUSION...........................................45
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AFFIDAVIT
I, DANIEL DREYER, being duly sworn, declare and state as
follows:
I. INTRODUCTION
1. I am a Special Agent (“SA”) with Internal Revenue
Service - Criminal Investigations (“IRS-CI”) in the Los
Angeles Field Office. I have been a Special Agent since July
2017. I am presently assigned to a group located in Santa
Ana, California. I attended college at University of
California, Santa Barbara, where I obtained a bachelor’s
degree in Business Economics with Emphasis in Accounting in
2002. After graduation, I worked in the field of public
accounting for approximately 12 years where I obtained the
job title of Senior Audit Manager. In 2008, I became
licensed as a certified public accountant (“CPA”) in the
State of California and I have maintained the requirements
for this license since that date. As an audit manager, I
oversaw complex audit engagements, including the analysis of
risks associated with financial fraud. Additionally, I
focused on methods and types of financial fraud and what
measures can be used to detect and deter such activity. I
attended training for approximately six months at the Federal
Law Enforcement Training Center in Glynco, Georgia, where I
graduated in February 2018. During my training, I learned
investigative techniques used by the Internal Revenue Service
(“IRS”) to investigate the criminal violations found in
Titles 18, 26, and 31 of the United States Code that fall
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under IRS-CI’s investigative jurisdiction. I have assisted
in the execution and planning of search warrants related to a
number of violations. As a Special Agent, I have
investigated money laundering, tax fraud, and Bank Secrecy
Act violations. As a result of my training and experience, I
am familiar with the methods used by criminals to commit
these types of offenses.
2. I make this affidavit in support of an application for
an arrest warrant for Carl Bradley Johansson (“JOHANSSON”) for
violations of 18 U.S.C. §§ 1344(2) and 2(b) (bank fraud and
causing an act to be done) and 18 U.S.C. § 1349 (conspiracy to
commit bank fraud).
3. The facts set forth in this affidavit are based upon
my personal observations, my training and experience, and
information obtained from other agents and witnesses. This
affidavit is intended to show merely that there is sufficient
probable cause for the requested warrant and does not purport to
set forth all of my knowledge of or investigation into this
matter. Unless specifically indicated otherwise, all
conversations and statements described in this affidavit are
related in substance and in part only.
II. SUMMARY OF PROBABLE CAUSE
5. In April 2018, a federal grand jury indicted
JOHANSSON, two of his employees, and two of his trucking
companies for conspiracy, welding without required
certifications, and false statements (C.D. Cal. Case No. 5:18-
CR-114-VAP) (the “Pending Criminal Case”). A first superseding
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indictment, which added six counts against JOHANSSON for tax
evasion, was filed on or about November 14, 2018, and a second
superseding indictment was filed on or about November 20, 2019.
JOHANSSON and the other defendants pleaded not guilty to all
charges. A trial is scheduled for September 14, 2021 before the
Honorable Virginia A. Phillips.
6. In the Pending Criminal Case, the government alleges,
inter alia, that JOHANSSON owned and controlled a series of
trucking companies yet kept his name off of his companies’ books
in order to (1) conceal his own involvement in the companies
from regulators investigating welding explosions at the
companies, and (2) avoid paying federal income taxes on his
considerable income from the companies. (In 1999, JOHANSSON
pled guilty to a similar scheme resulting from a different
welder’s death; JOHANSSON was sentenced to 15 months in prison
(C.D. Cal. Case No. 98-CR-674-RAP).)
7. In March 2019, while on pre-trial release in the
Pending Criminal Case, JOHANSSON set up yet another trucking
company, Western Distribution, LLC, and registered it as an LLC
in Wyoming. Western Distribution was based in Buena Park,
California (it is now based in Ontario, California), and focuses
on the transportation of jet fuel. In September 2019, JOHANSSON
converted Western Distribution, LLC into Advanced Distribution,
Inc. and then converted Advanced Distribution, Inc. into Western
Distribution, Inc. From that point forward, Western
Distribution, LLC no longer existed as a legal entity;
nonetheless, JOHANSSON continued operating the LLC as if nothing
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had changed.
8. In early 2020, when the COVID-19 pandemic hit the
United States, the federal government responded, as relevant
here, by setting up the Paycheck Protection Program (“PPP”),
whereby eligible businesses could apply to the Small Business
Administration (“SBA”) for low-interest (and potentially
forgivable) loans to obtain money that was to be used primarily
to pay their employees. The first page of the PPP loan
application asked applicants, inter alia, if they or their
owners were currently under indictment, and if they shared
common management with any other businesses.
9. On or about April 24, 2020, under JOHANSSON’s
direction, Western Distribution, LLC applied to a federally
insured bank (the “Bank”) for a PPP loan in the amount of
$436,390, even though the LLC no longer existed. JOHANSSON
listed his son, Co-conspirator #1, as the owner of Western
Distribution, LLC on the application, enabling him to answer the
“are your owners under indictment” question in the negative.
Despite the fact that JOHANSSON controlled and managed Western
Distribution, LLC at the same time that he controlled and
managed other companies -- including Wholesale Distribution,
Inc. (one of JOHANSSON’s co-defendants in the Pending Criminal
Case), and “Company A” -- the application claimed that Western
Distribution, LLC had no common management with any other
companies. The application was approved, and Western
Distribution, LLC received a PPP loan in the amount of $436,390.
10. “Company A” is another trucking company controlled by
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JOHANNSON. It is based in Gustine, California and focuses on
the transportation of agricultural materials. On or about April
15, 2020, under JOHANSSON’s direction, Company A applied to
another federally insured bank for its own PPP loan in the
amount of $286,505. JOHANSSON had his 85-year old mother listed
as Company A’s owner on Company A’s PPP application, enabling
him to again answer the “are your owners under indictment”
question in the negative. Like Western Distribution, LLC’s
application, Company A’s application claimed that Company A had
no common management with any other businesses. Company A’s
application was approved, and the company received a PPP loan in
the amount of $286,500.
11. Under JOHANSSON’s direction, Western Distribution, LLC
immediately spent its PPP funds in May and June 2020, in large
part on expenses unrelated to its payroll. Rather than using
the funds to keep his employees at Western Distribution, LLC on
payroll, JOHANSSON laid off most of the company’s employees.
Later in 2020, when Western Distribution, LLC’s business picked
back up, JOHANSSON rehired many of the same employees.
12. In order to create the impression that Western
Distribution, LLC had spent more of its PPP loan on its payroll
than it really did, in September 2020 JOHANSSON moved 21 of
Company A’s employees onto Western Distribution, LLC’s payroll.
This substantially increased Western Distribution, LLC’s
purported payroll, and made it look like Western Distribution,
LLC was spending much more of its money on payroll than it
really was, just before its 24-week window for spending the PPP
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funds closed. As a result of this ruse, Western Distribution,
LLC could claim -- falsely -- on its PPP loan forgiveness
application to the Bank in January 2021 that the company had met
the requisite threshold of spending at least sixty percent of
its PPP loan on payroll. In fact, as JOHANNSON was aware,
Western Distribution, LLC had spent much of the PPP loan on
other expenses in May and June 2020 and effectively laid off
most of its employees. As JOHANSSON was also aware, none of
Company A’s employees ever actually worked for Western
Distribution, LLC in 2020; JOHANSSON had transferred them onto
Western Distribution, LLC’s payroll solely as part of a shell
game to conceal his scheme from the Bank and federal regulators.
13. In March 2021, JOHANSSON caused Western Distribution,
LLC to repeat the same fraudulent representations concerning its
employee lists and payroll numbers when the company submitted a
second PPP loan application, for $231,527, to the Bank.
III. THE PAYCHECK PROTECTION PROGRAM
14. The CARES Act is a federal law enacted in around March
2020 and was designed to provide emergency financial assistance
to the millions of Americans who were suffering the economic
effects caused by the COVID-19 pandemic. One source of relief
provided by the CARES Act was the authorization of up to $349
billion in forgivable loans to small businesses for job
retention and certain other expenses, through a program referred
to as the PPP. In approximately April 2020, Congress authorized
over $300 billion in additional PPP funding.
15. In order to obtain a PPP loan, a qualifying business
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must submit a PPP loan application, which is signed by an
authorized representative of the business. The PPP loan
application requires the business (through its authorized
representative) to acknowledge the program rules and make
certain affirmative certifications in order to be eligible to
obtain the PPP loan. One such certification requires the
applicant (through its authorized representative) to affirm that
“[t]he [PPP loan] funds will be used to retain workers and
maintain payroll or make mortgage payments, lease payments, and
utility payments; I understand that if the funds are used for
unauthorized purposes, the federal government may pursue
criminal fraud charges.” In the PPP loan application, the small
business (through its authorized representative) must state,
among other things, its: (a) average monthly payroll expenses;
and (b) number of employees. These figures are used to
calculate the amount of money the small business is eligible to
receive under the PPP. In addition, businesses applying for a
PPP loan must provide documentation showing their payroll
expenses. These figures are used to calculate the amount of
money the small business is eligible to receive under the PPP.
In addition, businesses applying for a PPP loan must provide
documentation showing their payroll expenses.
16. PPP loan proceeds must be used by the business on
certain permissible expenses -- payroll costs, interest on
mortgages, rent, and utilities. The PPP allows the interest and
principal on the PPP loan to be entirely forgiven if the
business spends the loan proceeds on these expense items within
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a designated period of time (usually 24 weeks after receiving
the proceeds) and uses at least sixty percent of the PPP loan
proceeds on payroll expenses.
17. The PPP loan application includes eligibility
questions pertaining to current and past criminal histories of
any and all individuals owning twenty percent or more of the
applicant company. These questions are further certified by the
signer with the understanding that any material false statements
are punishable under specified laws and subject to both fines
and imprisonment. The application states that any recent felony
conviction or current indictment of an owner of twenty percent
or more of an applicant makes the applicant ineligible for PPP
funding.
IV. STATEMENT OF PROBABLE CAUSE
Based upon my review of investigative reports and notes,
bank records, witness statements, my discussions with other law
enforcement officers working on this investigation, and other
evidence, I learned the following:
A. JOHANSSON’s History of Concealing His Involvement in
His Trucking Companies
1. National Distribution Services, Inc.
23. On or about September 27, 1993, L.Q., a welder at
Atlas Carrier, Inc. (“Atlas”), located in Montebello,
California, was killed while working inside a cargo tanker when
his welding torch ignited fumes. Atlas, a hazardous-materials
transportation company, was not registered with the United
States Department of Transportation (“DOT”) to perform the
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repair of cargo tanks and did not have the “R” Stamp
certification required to carry out such welding. JOHANSSON was
the president and owner of Atlas, which did business under
several names including Ash Transportation, Inc., Petroleum
Delivery Services, and Ash Incorporated.
24. As result of the investigation into L.Q.’s death, in
around June 1998 JOHANSSON and an Atlas manager were indicted by
a federal grand jury on five counts, specifically, one count of
violating 18 U.S.C. § 371 and four counts of violating 49 U.S.C.
§ 5124 (welding without an “R” stamp). See United States v.
Carl Bradley Johansson, Case No. 98-CR-674-RAP (C.D. Cal.).
JOHANSSON pled guilty and was sentenced in 2000 to a term of 15
months’ imprisonment followed by two years of supervised
release. Upon his release from prison, JOHANSSON returned to
managing his trucking companies.
25. In 2007, the federal government sued JOHANSSON for
employment taxes owed by his former company, Atlas Bulk, Inc.
(C.D. Cal. Case No. 07-CV-659-AHS). The district court entered
judgment against JOHANSSON in 2008 for $923,440. After the
judgment was entered, JOHANSSON filed no personal tax returns
(and paid no personal income taxes) until after he was indicted
again in 2018, despite earning over a million dollars in
unreported income from his trucking companies during that period
and despite enjoying a lifestyle that included, for example,
living in a 16,000-square-foot mansion in Corona for which he
paid approximately $16,000 each month in rent from 2012 to 2018.
26. By no later 2012, JOHANSSON had taken control of
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National Distribution Services, Inc. (“National”), a hazardous-
materials transportation company based in Corona. Bank records
and employee interviews confirm that JOHANSSON controlled all
aspects of National’s business, from operations to banking. Yet
as a result of the tax case and increasing regulatory scrutiny
regarding his trucking companies’ safety, JOHANSSON went to
great lengths to conceal his involvement in National. For
example, when JOHANSSON took control of National, he listed his
former prison mate, W.S., as the President, Secretary,
Treasurer, and Director of National on many corporate filings.
JOHANSSON even created a fictional persona, “Keith Golatta,” to
use as an alias on corporate filings. On telephone
conversations with National’s customers and in other instances,
JOHANSSON sometimes said that he was “Keith Golatta,” even
though no such person existed.
27. After JOHANSSON failed to satisfy the tax judgment, in
2012 the IRS filed a tax lien against CBSA, a family partnership
controlled by JOHANSSON’s wife, which owned the industrial
property in Corona where National was based. The IRS alleged
that CBSA was JOHANSSON’s nominee.
28. On or about September 25, 2012, D.L.V., one of
JOHANSSON’s welders at National, was almost killed in an
explosion during a welding repair on one of National’s tankers.
29. On or about May 6, 2014, S.E., JOHANSSON’s other
welder at National, was killed by an explosion when his welding
torch ignited fumes inside one of National’s tankers. As with
the fatal 1993 explosion at Atlas and the 2012 explosion at
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National, the welding was taking place at JOHANSSON’s company
even though the company lacked the federally required “R” Stamp
to conduct such welding. D.L.V., the same welder who narrowly
survived the 2012 explosion, was seriously injured during the
explosion on or about May 6, 2014.
30. An investigation into the deadly explosion on May 6,
2014 ensued. During the investigation, JOHANSSON continued to
conceal his ownership and control of National. For example, on
or about May 6, 2014, JOHANSSON told investigators that he was a
customer service representative at National. JOHANSSON also
claimed that he was merely a “temp” and “paper pusher” at
National. To cover his tracks, in the weeks after the explosion
in May 2014, JOHANSSON arranged for National to hire a staffing
company to hire JOHANSSON as a temp at National, even though
JOHANSSON owned and controlled National.
2. Wholesale Distribution, Inc.
31. As a result of the deadly explosion in May 2014,
federal regulators imposed strict restrictions on the operations
at National. To evade those restrictions, JOHANSSON shut down
National and started a nearly identical company, Wholesale
Distribution Services, Inc. dba Quality Services (“Wholesale”),
in late 2014 and early 2015. Wholesale operated out of the same
warehouse as National, operated the same trucks, and had most of
the same drivers and office staff as National. As he had done
at National, JOHANSSON listed a “straw man” -- J.C., who sold
tires to JOHANSSON -- as Wholesale’s President and Owner on
corporate records, even though J.C. had almost no involvement in
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Wholesale. J.C. has confirmed that he was unaware that
JOHANSSON used his name and signature on Wholesale’s corporate
filings for years.
32. Bank records and employee interviews confirm that,
from 2015 to the present, JOHANSSON has controlled every aspect
of Wholesale, from operations to finances to criminal defense
issues. Every employee of Wholesale ultimately answers to
JOHANSSON. It was not until JOHANSSON and Wholesale were
indicted in the Pending Criminal Case in 2018 that JOHANSSON
finally began publicly admitting the scope of his involvement in
Wholesale. In the Pending Criminal Case, JOHANSSON repeatedly
has described himself as the corporate representative of
Wholesale.
3. “Company A”
33. As noted above, Company A is a trucking company based
in Gustine, California that hauls agricultural products. During
the investigation into, and civil litigation regarding, the
death of JOHANSSON’s welder on or about May 6, 2014, JOHANSSON
consistently downplayed his role at Company A. For example,
JOHANSSON acknowledged that he had been a member of Company A’s
Board of Directors, but claimed that he was only a consultant
and that he had no knowledge as to who owned Company A. Based
on my training and experience and my knowledge of the facts of
this case, I believe that JOHANSSON was deliberately minimizing
his role at, and command of, Company A. For example, as a
result of my investigation, I am aware of the following
information:
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a. Even though JOHANSSON has claimed, under oath,
that he does not know who owns Company A, JOHANSSON’s own
company, Systems Logistics, Inc. dba Tech Logistics (“Tech
Logistics”), bought Company A in around 2003. While JOHANSSON
also has tried to distance himself from Tech Logistics, he
himself signed the Stock Purchase Agreement in which Tech
Logistics bought Company A in 2003, in his capacity as Tech
Logistics’ Managing Director. (JOHANSSON’s wife signed the same
agreement as the buyer’s President.) Likewise, a document
obtained from the California Secretary of State, entitled
“Statement of Information” and dated October 14, 2003, shows
that JOHANSSON signed the document and described himself as the
Managing Director of Tech Logistics. JOHANSSON’s personal
attorney in Newport Beach was listed on the same document as
Tech Logistics’ registered agent for service of process.
b. Even though JOHANSSON has claimed, under oath,
that he had a very limited role at Company A, documents obtained
from the California Secretary of State show that: (1) on or
about July 19, 2015, JOHANSSON -- using the alias “Brad Johnson”
-- filed an Amended Articles of Incorporation for Company A, in
which he stated under oath that he was the President and
Secretary of Company A and in which he slightly modified the
company’s name; and (2) on or about September 21, 2015,
JOHANSSON, again using the alias “Brad Johnson,” filed an
Amended Articles of Incorporation, in which he stated that he
was the President and Secretary of the newly named company and
in which he changed the name of the company back to Company A’s
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original name.
c. A similar document, dated on or about October 27,
2010, lists “Keith Golwick” as Tech Logistics’ Director. Based
on my investigation in this case, I believe that “Keith Golwick”
may be another of JOHANSSON’s aliases. As set forth above, it
is well established that JOHANSSON frequently used the alias
“Keith Golatta” to conceal his involvement in National. (I have
checked law enforcement databases for individuals named “Keith
Golatta” and “Keith Golwick” and found no individuals with those
names during the relevant time periods.)
d. Documents obtained from another bank (“Bank B”)
confirm JOHANSSON’s longstanding financial control of Company A.
For example, a document entitled “Accounts Receivable Financing
and Security Agreement,” between Bank B and Company A and dated
or about July 5, 2006, listed JOHANSSON as the CEO of Company A
and JOHANSSON’s wife as the Director of Company A. A related
document from Bank B, entitled “Lockbox Service” and dated on or
about March 4, 2015, was signed by JOHANSSON, who described
himself as Company A’s Director. According to “Company A’s
Manager” (who has been the onsite manager for Company A’s truck
yards in Turlock and Gustine for the last two decades), the
financing of Company A’s receivables allowed for money to be
borrowed by Company A against future payments from customers.
In an interview, Company A’s Manager said that the first draw of
the loan -- which amounted to several hundred thousand dollars
-- was transferred to JOHANSSON and not used by Company A.
e. Company A’s Manager said in prior sworn testimony
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that, ever since Tech Logistics acquired Company A in 2003,
JOHANSSON has controlled Company A’s Manager’s employment at
Company A, acquired trucks for Company A, and handled all of
Company A’s insurance policies for its trucks. Company A’s
Manager repeated these statements in an interview in June 2021,
adding that JOHANSSON’s wife assisted on insurance issues.
f. JOHANSSON commonly obtained insurance policies
that covered National’s (and Wholesale’s) trucks as well as
Company A’s trucks. Several such documents listed, for example,
the insured as “National Distribution Services, Inc. DBA
[Company A].”
B. JOHANSSON’s Formation of Western Distribution, LLC in
Early 2019
34. According to documents filed with the Wyoming
Secretary of State and emails between JOHANSSON and Wyoming
Corporate Services, Inc. (which appears to be a dba of Capital
Administrations, LLC, the “Registered Agent” for Western
Distribution, LLC in Wyoming), JOHANSSON caused Western
Distribution, LLC to be registered as an LLC in Wyoming on or
about March 6, 2019. To my knowledge, this marked the formation
of Western Distribution, LLC as a legal entity. 1 JOHANSSON was
billed approximately $1,120 by the Registered Agent to set up
the LLC.
1 A document entitled “Operating Agreement Member Managed,”
allegedly dated February 25, 2019, purports to show the
formation date of Western Distribution, LLC as on or about
February 25, 2019. The date on that document does not appear to
be credible given that the same document states that the
company’s Articles of Organization were filed with the Wyoming
Secretary of State on or about March 6, 2019.
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35. Emails between JOHANSSON and the Registered Agent
confirm JOHANSSON’s role in the creation of Western
Distribution, LLC. For example, JOHANSSON used his own name,
email address, and phone number when communicating with the
Registered Agent.
36. An IRS Form SS-4, dated on or about March 14, 2019,
establishing the Employer Identification Number for Western
Distribution, LLC, was sent to JOHANSSON as a member of the LLC.
37. According to a document entitled “Application to
Register a Foreign Limited Liability Company LLC” from the
California Secretary of State’s website, Western Distribution,
LLC was registered as a Wyoming LLC in the State of California
on or about April 22, 2019.
38. On or about April 25, 2019, JOHANSSON submitted a Form
MCSA-1 to register Western Distribution, LLC with the Federal
Motor Carrier Safety Administration (“FMCSA”). The Form MCSA-1
is an application that businesses use in order to register with
FMCSA. In response to a question asking the applicant to list
the names of its officers, JOHANSSON listed himself.
39. The MCSA-1 Form asked, “Do you currently have, or have
you had within the last 3 years of the date of filing this
application, relationships involving common stock, common
ownership, common management, common control or familial
relationships with any FMCSA-regulated entities?” Even though
JOHANSSON was the sole officer of Wholesale and Wholesale was a
FMCSA-regulated entity (because, for example, it transported jet
fuel in interstate commerce), JOHANNSON checked “No.” In the
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“APPLICANT’S OATH” field, JOHANSSON’s name was printed and
digitally signed. JOHANSSON expressly verified that “all
information supplied on this form or relating to this
application is true and correct.” 2
C. JOHANSSON’s Fraudulent Use of Advanced Fuel Delivery’s
Name and DOT Registration Number
40. Advanced Fuel Delivery, LLC (“Advanced”) was a
trucking company based in Riverside. According to an interview
of “Advanced’s Managing Partner” in June 2021, Advanced was
planning to shut down its operations in 2019. In 2019,
JOHANSSON offered the owners of Advanced approximately $25,000
to purchase the company’s name and licenses. The owners
rejected JOHANSSON’s offer for being too low.
41. Thereafter, JOHANSSON appears to have started using
Advanced’s name and DOT registration number (3049566) as his
own. In interviews in June 2021, Advanced’s Managing Partner
said that (1) he had no knowledge that JOHANSSON was using
Advanced’s name and DOT registration number, and (2) there was
no reason for Advanced to apply for insurance policies in 2019
because the company was winding down. Even though JOHANSSON had
no ownership rights in Advanced, he applied for and obtained
insurance for his companies using Advanced’s name and DOT
registration number in 2019 and 2020. Documents obtained from
the insurer show, for example:
a. A Commercial Insurance Application, dated on or
On or about December 9, 2020, shortly after JOHANSSON
2
learned of this investigation, Western Distribution, LLC
submitted another Form MCSA-1 in which it admitted that it did
share common management with Wholesale.
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about June 18, 2019, listed Advanced as the applicant and
included a “dba Advanced Distribution” as well as “Western
Distribution” as another “Named Insured.” The contact name for
the applicant is “Jay Johnson,” who listed his email address as
JOHANSSON’s email address at Western Distribution, LLC and his
phone number as the phone number that JOHANSSON commonly listed
for Western Distribution, LLC (XXX-XXX-6840). 3 In response to
the question of whether the applicant has been indicted for any
crime of fraud, “Jay Johnson” responded, “N.”
b. An insurance document entitled “Risk Engineering
Field Evaluation,” dated on or about August 24, 2020, also
listed the contact for Advanced as a “Jay Johnson,” who again
used JOHANSSON’s email account at Western Distribution, LLC as
well as the same phone number associated with JOHANSSON. The
Evaluation reports listed Advanced’s DOT number (3049566) and
observed that “Jay runs the business day to day” and has “[b]een
in the petroleum distribution business for 25 years.”
c. A follow-up insurance policy, dated on or about
November 19, 2020, listed the insured as “Advanced Distribution,
Inc. dba Western Distribution.”
d. “Jay Johnson,” again using JOHANSSON’s email
3 This phone number appears to have been used previously by
J.S., one of JOHANSSON’s shop employees at Wholesale
Distribution, Inc. When J.S. left Wholesale, JOHANSSON appears
to have begun using the number himself. For example, phone
records for the same number (XXX-XXX-6840) show that between
approximately February 2019 and August 2020, the user of this
phone number called a phone number associated with JOHANSSON’s
wife approximately 3,590 times. Likewise, in an email dated on
or about May 13, 2021, Western Distribution, LLC’s dispatcher
wrote to a client that the company’s “Admin Manager” was “Brad”
and listed the same -6840 number as “Brad’s” number.
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address at Western Distribution, LLC and listing the -6840 phone
number as his cell phone, emailed the insurer repeatedly about
the policy, purportedly on behalf of Advanced. In one such
email, dated on or about September 24, 2020, “Jay Johnson” asked
the insurer for a discounted premium based on Advanced’s “almost
3 years claims free,” apparently alluding to the safety record
of a company unrelated to the trucking companies that JOHANSSON
actually owned. 4
42. Based on my training and experience, my knowledge of
this investigation, and my discussions with colleagues at the
DOT, I believe that “Jay Johnson” is yet another of JOHANSSON’s
aliases and that JOHANSSON was applying for insurance -- using
an alias and a different trucking company’s name and DOT number
-- to “piggy back” off of Advanced’s prior safety ratings while
concealing his own involvement in the scheme, which very likely
amounts to insurance fraud.
D. JOHANSSON’s Decision to Make Western Distribution, LLC
a Defunct Entity as of September 2019
43. On or about July 23, 2019, JOHANSSON sent an email
entitled “Western Distribution LLC” to the Registered Agent in
Wyoming. In the email, JOHANSSON asked, “1. Can Western
Distribution LLC be changed to a Corporation? 2. Is the name:
Advanced Distribution, Inc. available?” (Emphases in original.)
The Registered Agent replied to JOHANSSON in the affirmative.
4 The “Risk Engineering Field Evaluation” discussed above
states that “Jay Johnson” told the insurer that the company
hauled “no aviation fuels,” even though, according to Co-
conspirator #2, Western Distribution, LLC’s primary business was
hauling jet fuel.
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44. According to a corporate resolution for Advanced
Distribution, Inc. dated or about September 10, 2019 and filed
with the Wyoming Secretary of State, “the Director, Carl
Johansson, shall have full power and authority to act on behalf
of Advanced Distribution, Inc.”
45. According to documents filed with the Wyoming
Secretary of State and emails between JOHANSSON and the
Registered Agent, on or about September 12, 2019, JOHANSSON
caused Western Distribution, LLC to be converted into Advanced
Distribution, Inc., a Wyoming corporation.
46. According to documents obtained from the Registered
Agent, JOHANSSON requested, and was billed approximately $495,
for the conversion from the LLC to the corporation and the name
change from Western Distribution to Advanced Distribution.
47. According to a document entitled “Certificate of
Conversion” from the Wyoming Secretary of State, “Western
Distribution LLC, a Wyoming Limited Liability Company[,]
Converted to Western Distribution, Inc., a Wyoming For Profit
Corporation, On September 12, 2019.”
48. According to documents filed with the Wyoming
Secretary of State and emails between JOHANSSON and the
Registered Agent, on or about September 16, 2019, JOHANSSON
caused Advanced Distribution, Inc. to change its name to Western
Distribution, Inc.
49. On or about September 17, 2019, the Registered Agent
emailed confirmation of the name change to JOHANSSON, and wrote,
in an email entitled “Western Distribution, Inc.,” “Hello Brad,
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Please see attached Name Change for your company Western
Distribution, Inc.” Attached to the email was a “Certificate of
Name Change” from the Wyoming Secretary of State, dated on or
about September 16, 2019, that stated, in relevant part:
“Current Name: Western Distribution, Inc. Old Name: Advanced
Distribution, Inc.”
50. Based on the foregoing documents, to my knowledge,
after on or about September 12, 2019, Western Distribution, LLC
no longer existed as a legal entity. Instead, that entity had
been converted, first, to Advanced Distribution, Inc., and then,
a few days later, to Western Distribution, Inc., all at the
direction of JOHANSSON. 5
51. Based on my training and experience, and my knowledge
of this investigation, it is highly unusual for someone to
convert their LLC into a corporation and change its name twice
in one week. It is even more unusual for someone to then
disregard the newly formed corporation and continue operating
the business as a defunct LLC. I am not aware of any legitimate
purpose for such a scheme; to the contrary, while this
investigation is ongoing, I believe that JOHANSSON’s changes to
the names and legal formulations of Advanced and Western
Distribution were likely motivated by the insurance fraud scheme
5 On or about June 10, 2021, Western Distribution, LLC filed
its biennial update with the California Secretary of State, in
which the company claimed that it remained an active LLC in
Wyoming. That was false, as the only active entity in Wyoming
is the corporation that JOHANSSON caused to be established in
September 2019. Nothing in the LLC’s filings in Wyoming or
California suggests that the LLC has been reconstituted
elsewhere.
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described above. I also am not aware of any legitimate reason
why (as detailed below) JOHANSSON would apply for the PPP loan
in the name of the defunct LLC rather than in the name of the
new corporation. JOHANSSON’s personal involvement in the highly
unusual conversion of the LLC to a corporation in September
2019, as well as the PPP application in April 2020, causes me to
conclude that it is extremely unlikely that he continued
operating the defunct LLC by accident.
E. JOHANSSON’s Control of Western Distribution, LLC
52. Based on an interview of Co-conspirator #2 in April
2021 as well as previous interviews of Co-conspirator #2, I
learned the following:
a. Co-conspirator #2 has worked for JOHANSSON for
nearly three decades, including at National, Wholesale, and
Western Distribution, LLC. At each company, her main
responsibility has been handling the administrative side of
JOHANSSON’s business.
b. JOHANSSON was (and is) the Managing Director of
Western Distribution, LLC. Western Distribution, LLC had many
of the same management and employees as did Wholesale, which
JOHANSSON also controlled and managed. JOHANSSON set up Western
Distribution, LLC because he anticipated being sent to prison in
the Pending Criminal Case, and he envisioned his son, Co-
conspirator #1, running the new company while he was in prison.
c. JOHANSSON had the power to, and did, write checks
for Western Distribution, LLC. He determined his own pay and
determined the amount of Co-conspirator #1’s pay.
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d. Although JOHANSSON often listed his son, Co-
conspirator #1, as the owner of Western Distribution, LLC, Co-
conspirator #1 had almost no management role at the company.
53. Based on my review of bank records relating to Western
Distribution, LLC, I learned that JOHANSSON was the sole
signatory on each of the company’s bank accounts.
54. Based on credit reports, academic records, and my own
research, I know that for most of the time that Co-conspirator
#1 has been the alleged owner of Western Distribution, LLC, he
has held a day job as an entry-level financial analyst at an
investment firm in Long Beach. Co-conspirator #1 graduated from
college in around 2019, lives with his parents, and, aside from
his alleged ownership of Western Distribution, LLC, has no known
experience in the trucking industry. I am aware of no evidence
that Co-conspirator #1 had any role in Western Distribution,
LLC’s PPP loan application in April 2020 (detailed below), other
than purportedly reviewing and signing certain documents. 6
F. Western Distribution, LLC’s First PPP Loan Application
in April 2020
55. In order to apply for the PPP loan, JOHANSSON opened a
new bank account at a federally insured bank (the “Bank”) in
Modesto, California. To do so, JOHANSSON caused Western
Distribution, LLC to submit a number of documents to the Bank in
around April 2020, including a Beneficial Ownership
Certification Form, dated on or about April 22, 2020, the
6 As discussed below, Co-conspirator #1 played a larger role
in Western Distribution, LLC’s loan forgiveness application and
second PPP loan application in 2021.
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express purpose of which was “[t]o help the government fight
financial crime” because “Legal Entities can be abused to
disguise involvement in . . . tax evasion, corruption, fraud,
and other financial crimes.” The form asked for the name “of
one individual with significant responsibility for managing the
Legal Entity,” i.e., Western Distribution, LLC. The response
listed Co-conspirator #1 and claimed that he was the CEO of
Western Distribution, LLC.
56. According to Co-conspirator #2 (JOHANSSON’s office
administrator), JOHANSSON instructed her to fill out the PPP
loan application, and she emailed it to JOHANSSON for his
approval.
57. Western Distribution, LLC’s PPP loan application,
dated on or about April 24, 2020 and submitted to the Bank,
included the following:
a. Western Distribution, LLC checked the box for
being an LLC, not one of the boxes for corporations.
b. Western Distribution, LLC listed its average
monthly payroll as $174,556, for 31 employees.
c. Western Distribution, LLC requested a PPP loan in
the amount of $436,390 (i.e., approximately 2.5 times its
average monthly payroll).
d. Co-conspirator #1 was listed as the owner of 100%
of Western Distribution, LLC. The social security number listed
was the one associated with Co-conspirator #1.
e. Question #3 of the loan application stated: “Is
the Applicant or any owner of the Applicant an owner of any
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other business, or have common management with, any other
business? If yes, list all such businesses and describe the
relationship on a separate sheet identified as addendum A.” The
response was marked as “No,” and no addendum A was included.
f. Question #5 of the loan application stated: “Is
the applicant or any individual owning 20% or more of the equity
of the Applicant subject to an indictment, criminal information,
arraignment, or other means by which formal criminal charges are
brought in any jurisdiction ...?” The response was marked as
“No” and the initials “CJ” were handwritten next to the
response. 7
g. The loan application contained a number of
certifications regarding the applicant’s compliance with PPP
regulations, including, for example, “The funds will be used to
retain workers and maintain payroll or make mortgage interest
payments, lease payments, and utility payments, as specified
under the Paycheck Protection Rule; I understand that if the
funds are knowingly used for unauthorized purposes, the federal
government may hold me legally liable, such as for charges for
fraud.” The initials “CJ” were handwritten next to this
statement.
h. Under all of the certifications, the form was
signed in Co-conspirator #1’s name as the “Member (owner)” and
dated on or about April 24, 2020.
58. In order to support the value of payroll expenses
7 JOHANSSON and Co-conspirator #1 both have the initials
“C.J.”
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associated with the PPP loan, Western Distribution, LLC provided
the Bank with two documents from Paychex (a payroll services
company), both entitled “Payroll Report” and covering the first
quarter of 2020, showing the payroll expenses of Western
Distribution, LLC. The Quarterly Reports showed the following:
a. Western Distribution, LLC had two accounts at
Paychex: (1) an account ending in -6410, covering approximately
24 employees (who appear to be Western Distribution, LLC’s truck
drivers); and (2) an account ending in -6403, covering
approximately 16 employees (who appear to be Western
Distribution, LLC’s administrative staff and shop employees).
b. JOHANSSON was an employee who was being paid
wages.
c. Co-conspirator #1 was not listed anywhere.
59. A Paychex document entitled “Paycheck Protection
Program Data,” dated on or about April 5, 2020 and also
submitted to the Bank, combined the data from the Payroll
Reports and showed Western Distribution, LLC’s total payroll
costs for the first quarter of 2020 as $187,256.97.
G. Company A’s PPP Loan Application in April 2020
60. As set forth above, JOHANSSON has controlled Company A
since approximately 2003. Company A’s Manager (the long-time
onsite manager for Company A and the company’s former owner),
confirmed in an interview in June 2021 that JOHANSSON and
JOHANSSON’s wife remain in control of Company A.
61. Company A’s Manager also confirmed that JOHANSSON and
JOHANSSON’s wife directed him to apply for a PPP loan in around
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April 2020. Company A’s Manager said that JOHANSSON instructed
him on how to answer almost every question on Company A’s PPP
loan application.
62. Company A applied for a PPP loan, through its
federally insured bank, on or about April 15, 2020. Its
application included the following:
a. The average monthly payroll was listed as
$114,602, for 25 employees. The amount requested was $286,505
(i.e., approximately 2.5 times the average monthly payroll).
b. The owner of Company A was listed as JOHANSSON’s
85-year-old mother, who was described as owning 100% of the
company. The address listed for JOHANSSON’s mother corresponded
to an actual address of JOHANSSON’s mother, and the Social
Security Number listed corresponded to JOHANSSON’s mother as
well.
c. Question #3 of the loan application stated: “Is
the Applicant or any owner of the Applicant an owner of any
other business, or have common management with, any other
business? If yes, list all such businesses and describe the
relationship on a separate sheet identified as addendum A.” The
response was marked as “No,” and no addendum A was included.
d. Question #5 of the loan application form stated:
“Is the applicant or any individual owning 20% or more of the
equity of the Applicant subject to an indictment, criminal
information, arraignment, or other means by which formal
criminal charges are brought in any jurisdiction…?” The
response was marked as “No” and the initials of Company A’s
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Manager were digitally signed next to the response.
e. Under all of the certifications, the form was
digitally signed by Company A’s Manager and dated on or about
April 24, 2020.
63. Company A’s Manager told me in June 2021 that he had
no idea who owned Company A, but that he listed Johansson’s
mother because JOHANSSON instructed him to do so. Likewise,
Company A’s Manager said that JOHANSSON instructed him regarding
how to answer the questions about whether any of the company’s
owners had been indicted, and whether Company A had any common
management with other entities.
64. When law enforcement attempted to interview
JOHANSSON’s mother in June 2021, she said that she did not
remember if she owned a company called Company A because her
late husband owned several companies. (Her husband died in
2004.) She had no recollection of applying for a government
loan in Company A’s name, and she said that she was not familiar
with the name of Company A’s Manager (despite the fact that
Company A’s Manager has been Company A’s most senior employee
for decades). Similarly, when Company A’s Manager was
interviewed in June 2021, he said that he had never heard of
JOHANSSON’s mother until JOHANSSON directed him to list her as
the owner on the PPP application.
65. Based on Company A’s representations, Company A’s bank
issued a PPP loan to Company A in the amount of $286,500 on or
about May 6, 2020.
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H. Western Distribution, LLC’s Expenditure of Its First
PPP Loan
66. During an interview in around April 2021, Co-
conspirator #2 (JOHANSSON’s office administrator) told me the
following:
a. Once the COVID pandemic hit in March 2020, almost
all of Western Distribution, LLC’s business stopped and most of
the company’s employees were put on unemployment for
approximately five months.
b. The company did not rehire most of those
employees until approximately August or September 2020. Nor did
the company pay most of the employees it had laid off during
that period. An exception to this was that JOHANSSON put his
two sons on payroll after receiving the PPP loan; these were the
only “employees” on Western Distribution, LLC’s Paychex payroll
from approximately April to August 2020.
67. As part of this investigation, I obtained and analyzed
bank records from Bank of America for Western Distribution, LLC.
The analysis of the Bank of America account ending in -6403
showed that approximately $435,000 of PPP loan funds were
received between on or about May 7, 2020 and June 11, 2020. The
analysis further showed that by on or about June 15, 2020, all
proceeds from the PPP funding had been spent. Specifically:
a. On or about May 6, 2020 (i.e., just before the
PPP funds were disbursed), Account -6403 had an ending balance
of $614.08. On or about May 7, 2020, this account received the
initial PPP deposit of $85,000. On or about May 12, 2020, the
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account had an ending balance of $284.66. During this period,
the entire $85,000 was either paid directly towards business
expenses or payroll, or transferred to other accounts where it
was subsequently spent.
b. On or about May 13, 2020, Account -6403 had an
ending balance of $65.49. On or about May 14, 2020, this
account received a PPP deposit of $75,000. On or about May 15,
2020, the account had an ending balance of $14,344.65. On or
about May 15, 2020, $38,909.58 was either paid directly towards
business expenses or payroll, or transferred to other accounts
where it was subsequently spent.
c. Similarly, Account -6403 received the following
PPP payments:
i. $50,000 on or about May 19, 2020;
ii. $25,000 on or about May 22, 2020;
iii. $20,000 on or about May 26, 2020;
iv. $22,000 on or about May 28, 2020;
v. $25,000 on or about May 29, 2020;
vi. $39,000 on or about June 3, 2020;
vii. $25,000 on or about June 4, 2020;
viii. $40,000 on or about June 5, 2020; and
ix. $29,000 on or about June 11, 2020.
d. The PPP payments that Western Distribution, LLC
received between on or about May 7, 2020 and June 11, 2020
totaled approximately $435,000. As of on or about June 15,
2020, the ending balance in Account -6403 was $2,422.13. All
$435,000 was either paid directly towards business expenses or
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payroll, or transferred to other accounts where it was
subsequently spent.
e. In terms of how much of the PPP funds Western
Distribution, LLC actually spent on payroll, according to
Paychex and tax documents, the only two employees that WESTERN
paid in the second quarter of 2020 (i.e., April through June
2020, when the company spent the PPP funds) were JOHANSSON’s two
sons: Co-conspirator #1 (the purported owner of Western
Distribution, LLC) and his brother. For example, a document
entitled, “Quarterly Contribution Return and Report of Wages,”
covering Western Distribution, LLC’s second quarter of 2020,
lists JOHANSSON’s two sons as the company’s only paid employees
for that quarter.
f. Although the remainder of Western Distribution,
LLC’s employees were no longer paid via Paychex in the second
quarter of 2020, an analysis of the company’s bank records shows
that the company did continue paying a handful of employees via
company checks (i.e., off of Paychex’s books). For the period
from on or about May 7, 2020 to June 11, 2020 (i.e., when
Western Distribution, LLC spent its PPP loan proceeds), these
company checks to employees totaled approximately $91,731.
68. An Employee Earnings Record for Western Distribution,
LLC, dated on or about September 18, 2020, shows Co-conspirator
#1 as having a hire date of on or about May 16, 2020, i.e.,
approximately eight days after the PPP loan was funded. As
stated above, none of the documentation submitted by Western
Distribution, LLC to the Bank as part of the PPP loan
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application showed any payroll expenses for Co-conspirator #1.
It was only after the loan was processed in his name that Co-
conspirator #1 was added to the payroll for Western
Distribution, LLC. Based on my training and experience, and my
knowledge of this investigation, this indicates that JOHANSSON
was trying to create the appearance that his son was working at
the business in conjunction with the funding of the loan which
was dependent on his son’s alleged representations as the
purported owner.
I. The Transfer of Company A’s Employees to Western
Distribution, LLC’s Payroll Account
69. To be eligible for forgiveness of a PPP loan, a
borrower was required to spend at least sixty percent of its PPP
loan on payroll expenses within 24 weeks after the PPP loan was
issued. Western Distribution, LLC’s 24-week deadline was on or
about October 19, 2020. In September 2020, having laid off many
of its employees from approximately April 2020 to August 2020,
Western Distribution, LLC would have been unable to meet the
sixty-percent threshold, and thus would have been ineligible for
forgiveness of the entire loan, meaning the company, i.e.,
JOHANSSON, would have had to pay back a portion of the PPP funds
to the Bank. Accordingly, in or about September 2020, JOHANSSON
began implementing a scheme to transfer many of the employees of
Company A onto the payroll of Western Distribution, LLC, so that
Company A’s payroll expenses for those employees could be
counted as Western Distribution, LLC’s payroll expenses, so that
Western Distribution, LLC could deceive the Bank into believing
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that Western Distribution, LLC had met the sixty-percent
threshold. My bases for the foregoing conclusions include the
following:
a. On or about September 22, 2020, Western
Distribution, LLC directed that 21 of Company A’s employees (the
“21 Company A Employees”) in Company A’s Paychex account be
added to Western Distribution, LLC’s Paychex account (effective
on or about September 16, 2020). 8 From that date until at least
December 2020, the 21 Company A Employees were issued paychecks
by Western Distribution, LLC.
b. In an interview in June 2021, Company A’s Manager
said the following:
i. At no point from September 2020 through
December 2020 did any of the 21 Company A Employees work for
Western Distribution, LLC.
ii. JOHANSSON devised the scheme to put the 21
Company A Employees on the payroll of Western Distribution, LLC
by means of transferring them to Western Distribution, LLC’s
account at Paychex.
c. Email records corroborate the statement of
Company A’s Manager that JOHANNSON directed Company A to
transfer its employees to Western Distribution, LLC’s Paychex
account. For example, on or about September 10, 2020, JOHANSSON
emailed the wife of Company A’s Manager (who was Company A’s
office manager), asking to discuss the requirements of the loan
8 The 21 Company A Employees were D.A., D.A., G.B., J.C.B.,
J.C., M.C., N.E., J.F., R.G., G.H., T.H., J.H., D.M., J.M.,
R.M., C.M., E.M., D.O., E.P., B.P., and J.W.
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forgiveness application. Beginning on or about September 21,
2021, JOHANSSON and the wife of Company A’s Manager exchanged
emails regarding JOHANSSON’s proposal to create a “sub-account”
within Western Distribution, LLC’s Paychex account for Company
A’s employees. JOHANSSON sent to the wife of Company A’s
Manager the contact information for the Paychex representative
with whom JOHANSSON had spoken about setting up Company A’s
“sub-account.” And when there were delays regarding the
paystubs for the 21 Company A Employees, the wife of Company A’s
Manager emailed JOHANSSON to complain on or about October 6,
2020, and JOHANSSON responded a few minutes later saying that he
had just mailed them to her. On some of these emails, JOHANSSON
used his personal email account rather than his account at
Western Distribution, LLC.
d. In an interview, Company A’s Manager also said
that JOHANSSON forced Company A to cover the payroll expenses
for the 21 Company A Employees during the duration of the
scheme. Company A’s Manager said that Company A had to wire the
payroll expenses for the 21 Company A Employees to Western
Distribution, LLC even after those employees were shifted to
Western Distribution, LLC’s Paychex account. In other words,
even though JOHANSSON would later represent to the Bank that the
PPP funds that Western Distribution, LLC had received had been
spent (in part) on the 21 Company A Employees, that was false:
Company A was having to pay the payroll expenses of those
employees out of Company A’s own accounts. According to Company
A’s Manager, JOHANSSON did not use Western Distribution, LLC’s
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own funds to pay the 21 Company A Employees.
e. Bank records corroborate the statement of Company
A’s Manager that JOHANSSON made Company A reimburse Western
Distribution, LLC for the payroll expenses of the 21 Company A
Employees. Wire transfer records show that beginning in late
September 2020 and continuing through December 2020, Company A
sent approximately 26 wire transfers to Western Distribution,
LLC totaling approximately $339,900, in amounts tied to the
payroll expenses for the 21 Company A Employees who had been
moved to Western Distribution, LLC’s payroll.
f. Email records also show that JOHANSSON apparently
did not see any need for the scheme to continue into 2021. For
example, on or about December 28, 2020, JOHANSSON wrote to the
wife of Company A’s Manager, “[M]ake this the last week ... go
back to your own next week.” (Ellipsis in original.) The next
day, the wife of Company A’s Manager wrote to Paychex, “We will
go ahead and run the weekly payroll information we have you
yesterday under the Western trucker account.... We will go back
to everyone under the [Company A] account next week.”
J. Western Distribution, LLC’s Fraudulent PPP Loan
Forgiveness Application
70. Western Distribution, LLC submitted a PPP loan
forgiveness application to the Bank on or about January 19,
2021. To be eligible for forgiveness of the PPP loan, Western
Distribution, LLC was required to submit documentation of how it
spent the PPP loan proceeds, including documents regarding
payroll, rent, etc.
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71. According to Co-conspirator #2, she filled out the PPP
loan forgiveness application at JOHANSSON’s direction.
72. The PPP loan forgiveness application form contained a
number of certifications regarding the borrower’s compliance
with PPP regulations. For example:
a. “The dollar amount for which forgiveness is
requested was used to pay costs that are eligible for
forgiveness”;
b. “I understand that if the funds were knowingly
used for unauthorized purposes, the federal government may
pursue recovery of loan amounts and/or civil or criminal fraud
charges”; and
c. “The information provided in this application and
the information provided in all supporting documents and forms
is true and correct in all material respects.”
73. Next to each of these certifications, the initials
“CJ” were handwritten. The certification was signed in the name
of Co-conspirator #1, who described himself as the LLC Member
and dated the form “1/19/21.” The handwriting of the signature,
as well as the handwritten initials “CJ” on the same page next
to the certifications, look nothing like the signature and
handwritten initials on Western Distribution, LLC’s PPP loan
application. While I am by no means a handwriting expert, based
on my training and experience, and my knowledge of this
investigation (including the fact that JOHANSSON learned of the
investigation in late 2020), I believe that JOHANSSON had Co-
conspirator #1 sign the loan forgiveness application, whereas I
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believe that in April 2020 JOHANSSON likely signed the PPP loan
application forms using Co-conspirator #1’s name. 9
74. The payroll records from Paychex that Western
Distribution, LLC submitted to the Bank as part of the loan
forgiveness application listed the employees not only from
Western’s own Paychex accounts (-6403 and -6410), but also a
separate account (-0968) including the 21 Company A Employees as
well as eight employees of a Texas company associated with
JOHANSSON. Specifically, Western Distribution, LLC provided the
Bank a spreadsheet entitled “PPP Forgiveness Data,” dated on or
about December 11, 2020, purporting to show Western
Distribution, LLC’s payroll expenses from on or about May 5,
2020 to October 19, 2020. The spreadsheet shows the following:
a. Twenty-two employees from Western’s two Paychex
accounts had a combined pay of $235,166.51.
b. Twenty-nine employees from the -0968 account had
a combined pay of $121,425.01.
c. The total payroll was $356,591.52.
d. Co-conspirator #1 was the highest paid employee
on the spreadsheet, with pay more than double the next highest
employee of Western Distribution, LLC or Company A.
75. When the Bank asked Western Distribution, LLC for
details regarding its 2020 payroll on or about February 19,
2021, Co-conspirator #2 responded three days later that “We have
9 The government is conducting a handwriting analysis of the
various signatures to determine if JOHANSSON forged his son’s
signatures on the PPP loan application; the results are not yet
available.
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3 different accounts with Paychex – different area / departments
etc.” Western Distribution, LLC did not disclose to the Bank
that the 21 Company A Employees did not work at Western
Distribution, LLC. Nor did Western Distribution, LLC disclose
to the Bank that Company A was not a department of Western
Distribution, LLC but rather a separate company with a separate
location and a separate business.
76. As of on or about June 29, 2021, the Bank was still
processing the loan forgiveness application. On or about that
date, I was told by the Bank that its review and approval of the
forgiveness application were imminent.
K. Western Distribution, LLC’s Fraudulent Second PPP Loan
Application in March 2021
77. On or about March 24, 2021, Western Distribution, LLC
applied for a second PPP loan (the “Second PPP Application”),
also through the Bank. The Second PPP Application included the
following:
a. The amount requested was $231,527 (i.e., 2.5
times the purported Average Monthly Payroll of $92,611).
b. The company again claimed that it was an LLC,
rather than a corporation.
c. The owner was listed as Co-conspirator #1, who
was described as owning 100% of the company and listed a social
security number matching Co-conspirator #1.
d. Question #3 stated: “Is the Applicant or any
owner of the Applicant an owner of any other business, or have
common management (including a management agreement) with any
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other business? If yes, list all such businesses (including
their TINs if available) and describe the relationship on a
separate sheet identified as addendum A.” The response again
was marked as “No,” and no addendum A was included.
e. Question #4 stated: “Is the applicant or any
individual owning 20% or more of the equity of the Applicant
presently incarcerated or, for any felony, presently subject to
an indictment, criminal information, arraignment, or other means
by which formal criminal charges are brought in any
jurisdiction?” The response again was marked as “No” and the
initials “CJ” were handwritten next to the response.
f. The application listed a series of certifications
to be made by the borrower, similar to the ones discussed above
for Western Distribution, LLC’s first PPP loan application. For
example, “I certify that the information provided in this
application and the information provided in all supporting
documents and forms is true and correct in all material
respects.” The initials “CJ” were written next to each
certification.
g. The application was signed by Co-conspirator #1,
whose title was listed as “Owner,” and dated on or about March
24, 2021.
h. Documents submitted by Western Distribution, LLC
as part of the Second PPP Application reflected the same scheme
on which the company based its loan forgiveness application two
months earlier: Western Distribution, LLC artificially inflated
its payroll costs by including Company A’s employees who never
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worked for Western Distribution, LLC. The Second PPP
Application lumped together Paychex account -0968 (containing
the 21 Company A Employees), which had $139,934 in payroll
expenses in September and October 2020, with Western’s two other
Paychex accounts. The payroll expenses for account -0968 were
higher than the payroll expenses for Western’s other Paychex
accounts (due in part to the fact that JOHANSSON removed almost
all of his employees – except his two sons – from the Paychex
payroll for much of 2020).
78. Based on the representations in the application, on or
about March 24, 2021, the Bank issued a second PPP loan to
Western Distribution, LLC in the amount of $231,527.
79. Company A was likely ineligible to receive a second
PPP loan because the pandemic did not cause the company the
requisite twenty-five percent decline in revenues for any
quarter in 2019 as compared to the same quarter in 2020. Based
on my training and experience, and my knowledge of this
investigation, I believe that JOHANSSON represented to the Bank
in the Second PPP Application that the Company A employees were
actually employees of Western Distribution, LLC -- even though
they were not -- because (1) he need to be consistent with the
fraudulent PPP loan forgiveness application that he had caused
Western Distribution, LLC to submit only months earlier, and (2)
he knew that Company A was ineligible to obtain a second PPP
loan on its own.
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L. JOHANSSON’s Concurrent Fraud on the Department of
Transportation
80. At the same time that JOHANSSON was claiming that
Western Distribution, LLC had dozens of employees for purposes
of the PPP fraud, he was causing the company to make filings
with the DOT that told a much different story.
81. As noted above, on or about April 25, 2019, JOHANSSON
filed a Form MCSA-1 to register Western Distribution, LLC with
the FMCSA, in which he wrote that Western Distribution, LLC
operated only one tanker truck. Under penalty of perjury, in
response to the question, “Do you currently have, or have had
within the last 3 years of the date of filing this application,
relationships involving common stock, common ownership, common
management, common control or familial relationships with and
FMCSA-regulated entities?,” JOHANSSON responded “No.” 10 As a
result of the filing of the Form MCSA-1, JOHANSSON obtained a
DOT registration number for Western Distribution, LLC
(#3278747).
82. The following chart shows relevant data from the MCS-
150 forms (MCS-150 forms are periodic updates required by FMCSA)
submitted by Western Distribution, LLC (DOT #3278747) and
Western Distribution, Inc. (DOT #3533763):
10Based on my discussions with colleagues at the DOT,
Wholesale was a FMCSA-regulated entity because, at a minimum, it
hauled jet fuel in interstate commerce.
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Date Named DOT Number Signatory (and Title) Total
Entity Number of
Drivers
5/17/2019 LLC 3278747 Carl Brad Johansson 1
(CEO)
4/6/2020 Corp. 3278747 Carl Johansson 3
(President)
10/5/2020 Corp. 3278747 Carl Johansson 28
(Operations Manager)
11/2/2020 Corp. 3278747 Carl Johansson 1
(Operations Manager)
12/23/2020 LLC 3533763 Carl Johansson (Admin. 1
Manager)
12/29/2020 Corp. 3278747 Carl Johansson 1
(Operations Manager)
83. The signatory on each of these forms certified that,
“[u]nder penalties of perjury, I declare that the information
entered on this report is, to the best of my knowledge and
belief, true, correct, and complete.” Based on my training and
experience, and my knowledge of this investigation, I believe
that JOHANSSON was the signatory for each of these forms (i.e.,
rather than Co-conspirator #1, who has a very similar name).
For example:
a. The person applying for a PIN number for the
FMCSA online portal for Western Distribution, Inc. was using the
Western Distribution email account that Co-conspirator #2
confirmed was JOHANSSON’s email account. (Co-conspirator #2
also confirmed that Co-conspirator #1 did not have an email
account at Western Distribution.)
b. The email account listed on each of these MCS-150
Forms was JOHANSSON’s email account.
c. For more than a decade (first at National, and
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Case 5:21-cr-00170-JFW Document 1 Filed 07/02/21 Page 46 of 48 Page ID #:46
then at Wholesale, and then at Western Distribution, LLC),
JOHANSSON has commonly referred to himself as the Administrative
Manager and Operations Manager of his companies, which is the
same title used to describe “Carl Johansson” on the MCS-150
forms.
84. Based on my review of the Paychex payroll records for
Western Distribution, LLC, and my training and experience, I
believe that the information that JOHANSSON caused to be
submitted on the MCS-150 Forms was false and misleading. During
the fall of 2020, for example, Western Distribution, LLC
employed at least 17 drivers (excluding the Company A employees
fraudulently transferred to Western Distribution, LLC’s Paychex
account). Likewise, Western Distribution, LLC – a trucking
company that JOHANSSON repeatedly claimed to FMCSA had only one
driver – reported approximately $1 million in “Gross Trucking
Income” on its books for each quarter in 2020.
85. In contrast, there is no Paychex account for Western
Distribution, Inc., and I am not aware of any drivers employed
by Western Distribution, Inc. It is possible, even likely, that
Western Distribution, Inc. has never carried out any actual
trucking activities. For example, the FMCSA database for
roadside inspections (which tracks when trucks operated by a
registered trucking company are inspected at certain roadside
locations) does not contain a single inspection record for
trucks operating under DOT #3278747. Based on my discussions
with colleagues at the DOT, I believe that it is unusual for a
trucking company not to have any roadside inspections. Based on
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the Paychex data and the lack of any roadside inspections for
Western Distribution, Inc., I believe that JOHANSSON’s sworn
claim that Western Distribution, Inc. employed 28 drivers on
October 5, 2020 was false.
86. As the chart above shows, sometime on or before
December 23, 2020, JOHANSSON obtained a second DOT registration
number for Western Distribution, LLC (DOT #3533763). Based on
my training and experience, and my discussions with colleagues
at the DOT, there does not appear to be any legitimate reason
why JOHANSSON would need two different DOT registration numbers
for Western Distribution. This appears to be a continuation of
JOHANSSON’s decades-long practice of obtaining and maintaining
multiple DOT registration numbers to evade regulators and,
likely, secure insurance policies and clients that otherwise
would have been unavailable to JOHANSSON due to his trucking
companies’ history of safety violations.
//
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V. CONCLUSION
87. Based on the foregoing, there is probable cause to
believe that JOHANSSON violated Title 18, United States Code,
Sections 1344(2) and 2(b) (bank fraud and causing an act to be
done) and Title 18, United States Code, Section 1349 (conspiracy
to commit bank fraud).
/S/
DANIEL DREYER, Special Agent
Internal Revenue Service –
Criminal Investigations
Subscribed to and sworn before
me on July 2
___, 2021.
HONORABLE ALEXANDER F. MacKINNON
UNITED STATES MAGISTRATE JUDGE
45
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